Expert blames developers for downturns in real estate sector
The slow down in Nigeria’s real estate industry has been blamed on over supply in commercial and retail sector as well as inappropriate supply in the residential sector.
A facility manager, Dr. Mohammed Balogun, who disclosed this at media chat with journalists, said there is need for industry players to come up with innovative ideas to accelerate the sector.
Balogun, who is the managing director and chief executive of the Global Property & Facilities International Ltd, (GPFI), said investors and developers are not adding value to the economy but creating problem for the government because they are not following the trends.
Relying on the latest Gross Domestic Product (GDP) figure, which shows negative growth of -2.68 per cent at the end of October 2018 and the real estate Q3 contribution to GDP dropping from 7.09 per cent in Q2 to 6.88 per cent in Q3, expressed worries that the investors are profit minded rather than being value minded.
According to him, the industry players need to restructure to be at its best and players need to do just that.
‘We don’t need to build out of proportion but to follow the numbers because the market need a smaller apartments and not large buildings.
“With over 60 per cent occupancy rate, people, who understands the market are converting the three bedrooms to one room for quicker returns to investments rather than being stock on larger apartments”, he added.
For 2019, Dr. Balogun said being an election year; the industry will continue to slow down up till April when budget is likely to be passed.
He however urged stakeholders in the sector to come up with initiatives to weather the murky waters.
“We need to do some differently to get a better result; the recent procedure will not lead to the expected outcome because trends are changing”, he said.
He also stressed the need for professionals to advise their clients appropriately so that they can make wise invest decision and not to be too profit minded.
On the facility management (FM) sector, he said, it is rapidly expanding with growing awareness, acceptance and the global market is changing with players strengthening their presence in Africa with merges and partnerships.
According to him, clients’ expectation has increased and demand for FM value has also increased away from service.
“The out – going year will also go down as a significant year for the sector with the launch of the 4 FM ISO standards, ISO 41011:2017, 41012:2017, 41013:2017 and 41001:2018; to ensure uniformity in the way FM is seen, appreciated, valued and implemented by both clients and providers, with the new FM definition which states that
“FM is an organization function which integrates people, place and process within the built environment with the purpose of improving the quality of life of people and productivity of the core business”.
“In Nigeria, we launched the National FM body – Association of FM Practitioners Nigeria, AFMPN, the final approval of the FM bill 2018 as well as the Federal Ministry Power, Works and Housing’s draft National Policy on Maintenance of Public.
“As a company, we have grown well, improved, created new solutions, innovative ideas and support for our clients, suppliers and put our employees at the highest level of focus”, he added.
Established about 18years ago as the first fully defined and classified Facilities Management company in Nigeria, GPFI, was has over the years evolved through mergers, acquisitions, and share restructuring,
The company is gradually becoming a Pan African company with operations in major Africa cities of Nigeria, Ghana, Cote d’ Ivoire, Cameroon and Kenya.